Monday, June 20, 2011

Turk - Confidence in Fiat Currencies is Beginning to Collapse

Article From KingWorldNews.com :
With riots in Greece, gold at new all-time highs in British Pounds and confidence evaporating in paper currencies globally, today King World News interviewed James Turk out of Spain.  When asked about the escalating situation in Europe Turk responded, “The big news in Europe this morning Eric is that the EU politicians have once again tried to come up with a solution to the Greek dilemma, but there is nothing new.  The politicians fail to recognize that Greece is suffering from its debt burden, just like Iceland was suffering from a similar fate. 

The Icelandic people had the good sense to default and maintain their sovereignty.  Hopefully Greece will follow the same pattern and kick out the IMF and other organizations who are working for the banks and not the best interests of the Greek people.”

James Turk continues:

“Ironically, by trying to solve the Greek problem with more debt, EU politicians and the ECB are threatening the very existence and credibility of the Euro.  As we discussed last time, one has to question whether the ECB is solvent given all of the questionable sovereign debts it has purchased.  What’s clear to me is that the basic principle of sound money is being thrown out the window because politicians are using the Euro as a political tool rather than what money is supposed to be, a neutral tool in commerce.”

When asked about the action in gold and silver Turk stated, “I think Gold’s strength last week was very important, and even though silver was down for the week, it showed good relative strength by holding $35.  We may have one or two more frustrating days of sideways movement, but it looks increasingly likely that by the end of this month gold and silver will be heading higher, further confirming the point we’ve already discussed which is this correction is over.” 

When asked about the mining shares Turk had this to say, “I know there is a lot of emotional sentiment building Eric with regards to the mining shares.  Many people are worried about how the mining shares are underperforming bullion, but the emotional sentiment is typical when you approach an important low, which I think is what is happening here.

You have to look at the mining stocks in relation to the big picture point of view as to what is happening with the stock market overall.  The Fed is threatening to stop its quantitative easing program at the end of this month.  As you and I have discussed before....

Continue reading James Turk’s interview below...
“I think it is just a bluff because the US government is relying heavily on Fed monetization for all of the debt the US government is borrowing.

What I am reminded of is the similarities today with a year ago when the Fed ended its first round of quantitative easing and the stock market started to tank.  Over the next few weeks, as investors start to realize QE3 or whatever the Fed calls it is inevitable and starts in August if not before, the stock market will turn around and head higher just like it did last summer in anticipation of QE2. 

In fact Eric that is what I think the gold market is telling us by its relative strength.  People who own the mining shares are looking in the wrong direction.  Don’t focus on the shares weakness, instead focus on gold’s strength.  This is not only why you should hold on to your shares, but look to accumulate more on your steady dollar cost averaging program, and don’t pay so much attention to the price.  I expect the shares will come around in due course for the simple reason they are so undervalued.

If KWN readers and listeners haven’t already tuned in to the Nigel Farage interview, I highly recommend they listen to what it is he has to say because he so clearly explains the political dimensions of what is happening here in Europe.  We are very close to a major crisis here in Europe Eric, it could erupt any day. 

When this crisis breaks out there will be a tremendous flight to safety that I expect will send gold to my $1,800 target.  The thing that people need to understand is that it ($1,800 gold) can happen in the blink of an eye. 

Most people don’t recognize what can happen to precious metals prices when confidence in the fiat currency finally breaks, which seems to be happening with gold at all-time highs in British Pounds and gold ready to make a record high against the Euro.  The rise in gold is a clear sign that confidence in fiat currencies is beginning to collapse.”


-article from Kingworldnews.com

Sinclair - You’re Out of Your Mind If You Sell Gold Assets Now

Article from KingWorldNews.com :
With stock markets and other asset classes getting mauled, real money, gold and silver, are attempting to hold their ground, so today King World News interviewed legendary Jim Sinclair.  When asked about the action Sinclair stated, “Well I think the gold market today is acting extraordinarily well being on the positive side when every other asset that people can find are being thrown out the window, especially in the equity markets...Where gold is concerned you are dealing with the condition of the international banks, with the balance sheets of the financial entities of the world.

So the potential right now, right here, right at this point for an error in judgment that would set off a loss of confidence is present, clear and in all probability something that we are going to be facing well into the summer months.  Yeah, gold can rally (here), contrary to the opinions of those who believe in seasonality in monetary items.”

Jim Sinclair continues:

“The problem is so serious, the problem is so present time, the problem is so real that it has inherent in it the probability that the economy is not going to have a significant recovery for more than a decade.  And the standard of living in the United States, the standard of many who are reading this now, especially those who have taken no measures whatsoever to protect themselves, who simply look at it as reading something of interest but not really acting on it, is going to be so significantly impacted as to make the middle-class or higher middle-class join the serf class.  This is as serious as it gets.

...This has gone so far that there is no solution that can be applied and the only practical  method is to continue to expand their (the Fed’s) monetary aggregates to continue to hold down interest rates.  And hopefully kicking the can down the road until somebody else is in charge and that’s exactly what they are doing.

Well let’s just assume for a moment that QE is in fact limited to June 30th and let’s assume for a moment that the central bank of the United States would take a conservative restrictive approach towards monetary policy, I would suggest to you that the stock market would peel off 4,000 points so fast you would get wind burns.  I suggest that if anything like that happened exposing the balance sheets of the financial institutions, that you would have to return to QE with a vengeance, unparalleled, unprecedented in history....

Continue reading the Jim Sinclair interview below...

“That’s not something that only I know, that’s something that the Fed knows very well themselves, and today is giving them a little bit of a preview of what would happen if in fact they curtail QE and don’t enter into a QE3 by whatever name they choose to call it.

The Dow under 12,000 is starting to scare a lot of people.  A minus 200 Dow Jones is something that is so close to a point of causing such problems.  Bear in mind that the last time we were minus 300 we ran into the flash crash.  We have not entered into a new area of regulation that could prevent that in the future.  You start putting orders in when there’s no bids and you’re going to get prices you won’t believe.

You don’t need one more thing to happen, you don’t need any more problems, you don’t need any more degrees of problems.  You’re in a situation right now where if confidence is to be lost, be it by the equity market taking an outrageous header, the price of gold will not only go to $1,650, $3,000, $5,000, but has the possibility of going into five figures based on just what we have here and now.  That’s what you need to understand.  That’s why if you let go of any of your (quality) gold shares, you let go of your gold, you let go of your coins, you are out of your mind.”

This was the most powerful interview Jim Sinclair has ever given on KWN.  Sinclair laid out with remarkable precision just how dangerous the situation is today.

-article from : kingworldnews.com